(Translation)
January 24, 2014
Dear Sirs:
Name of the Company:

Kewpie Corporation

Representative:

Minesaburo Miyake,
President and Representative
Director(Code No. 2809; the first section of the Tokyo Stock Exchange)
Person to contact:

Nobuo Inoue,
Director and General Manager ofOperation Promote Department

Notice of Continuation of the Defense Plan Against Large Purchase Actions of
the Shares of the Company (Takeover Defense Plan)

Kewpie Corporation (the "Company"), at the meeting of its Board of Directors held on
January 11, 2008, adopted a resolution on a "fundamental policy on what the person(s) should
be like to control the determination of the financial and business policy of the Company" (the"Fundamental Policy") and determined to adopt a "defense plan against large purchase actionsof the shares of the Company (takeover defense plan)" as measures to prevent thedetermination of the financial and business policy of the Company from being controlled byany inadequate person in consideration of the Fundamental Policy, which was approved by
the shareholders at the 95th Ordinary General Meeting of Shareholders of the Company held
on February 22, 2008. Thereafter, at the 98th Ordinary General Meeting of Shareholders of
the Company held on February 23, 2011, the continuation of the takeover defense plan, as
adequately revised, was approved (the takeover defense plan, as revised, will hereinafter bereferred to as the "Former Defense Plan").
As the Former Defense Plan is stipulated to expire upon the close of the 101stOrdinary General Meeting of Shareholders to be held no later than February 28, 2014, theCompany has continued discussions on what it should be like, including whether or not toextend it, from the perspective of the enhancement of its corporate value and the common
interests of its shareholders while taking into consideration the amendments to related laws
and ordinances, changes in social and economic conditions and other factors. As a result ofsuch discussions, notice is hereby given that the Company, at the meeting of its Board of
Directors held on January 24, 2014, determined to maintain the Fundamental Policy and-1–continue the Former Defense Plan, with some revisions of the statements therein, including
dates, as a "defense plan against large purchase actions of the shares of the Company(takeover defense plan)" (the "Defense Plan") for the period from February 25, 2014 to theclose of the 104th Ordinary General Meeting of Shareholders to be held no later thanFebruary 28, 2017, subject to approval of the shareholders at the 101st Ordinary General
Meeting of Shareholders to be held on February 25, 2014.
As to the particulars of the Fundamental Policy and the Defense Plan, please refer tothe attachment hereto.
At the meeting of the Board of Directors at which the adoption of the Defense Plan
was determined, the Statutory Auditors of the Company, four in all, including three outside
Statutory Auditors, were present and each of them expressed his opinion in favor of the
adoption of the Defense Plan on condition that the plan should be implemented properly.
As of the date hereof, no approach or offer has been made for a large purchase of theshares of the Company and the Company does not know any imminent threat of such
purchase.
- END -

-2–

(Attachment)
I.

Fundamental policy on what the person(s) should be like to control the determinationof the financial and business policy of the Company

1.

Source of the corporate value of the Company(1)

Management philosophy

The Company has advocated the following motto and precepts as its spirit offoundation and provided in its Articles of Incorporation for the continuance of contributing to
the people's healthy eating life by placing first priority on security and safety as a fundamental
principle in its business activities:
The Company's motto:

Share the joy of endeavors

The Company's precepts:

Value moral;
Endeavor to innovate; andRespect your parents

The Group, under the management philosophy "we aspire to contribute to awell-accepted dietary system of tasty and gentle food, with other expertise unique to us," hasengaged in: (i) Condiments products business, (ii) Egg products business, (iii) Delicatessen
products business, (iv) Processed foods business, (v) Fine chemical products business, (vi)Distribution system business and (vii) Common business operations business.
(2)

Actions based on the management philosophy

The Group has maintained its attitude of giving first priority to quality since its
foundation and endeavors to provide products satisfactory to customers at all times, whereby"aiming to be a most trusted and loved food manufacturing group by each customers."
In addition, the Group has represented its attitude of continuing to provide its peculiar
products and services wholeheartedly in various stages of diets of customers during their
lifetime as the slogan "Food, for ages 0-100" and all officers and employees of the Group
have put the slogan into practice to enhance its corporate value.

-3–

(3)

Strength of business development

Since the launch of the nation's first mayonnaise in 1925, the Company has exerted its
all-time efforts to cultivate and expand the market of salad condiments throughcommercialization of dressings, among others and has maintained a large brand share as aleading maker. In addition, the Company sells jams, including orange marmalades, andpasta sauces, as well as baby foods and health foods. In 1998, the Company launched
universal-design foods (or foods for the sick and aged). As stated above, the Company, as apioneer in the food industry, has always taken the initiative in developing quality products
according to various stages of diets, which we believe is the engine to cultivate the powers of
its brand highly trusted by customers.
Since its foundation, the Company has supplied eggs, main ingredients of mayonnaise,as liquid eggs, to process manufacturers. In 1955, the Company launched mayonnaise forindustrial use and since the 1960s, has dealt in chilled products and prepared foods and soldcut vegetables. Thus, we also believe that the Group's strength lies in not only the quality
and palatability of its products but its continued proposal of the joy of eating in the broad
areas of home meal, home-meal replacement and eating-out.
Since its formation, the Company has regarded the "insistence on high quality,""capabilities of developing products ahead of customer needs" and "seeking of synergies ineach business development" as the source of its corporate value. Furthermore, as
represented in the Company's motto "share the joy of endeavors," all officers and employees
share the attitude of overcoming difficulties with originality and ingenuity to achieve theircommon targets in business activities and sharing their joys. We believe this attitude shouldbe perpetuated as a corporate culture that may sustain the source of the Group's corporate
value.
2.

Details of the fundamental policy

The Company considers that in the event that its shares are to be purchased for the
purpose of mass acquisition, it should be left to final judgment of the shareholders whether or
not the Company will agree thereto, and does not deny any import or effect of vitalization of
its corporate activities through a change in the controlling interest.
However, for the management of the Company and the Group, it is essential to have agood understanding of a broad range of know-how and accumulated experience, as well as therelationships fostered with its stakeholders, including customers, trading partners andemployees, among others. Without such good understanding, it would be impossible to-4–

properly judge the shareholder value that may be raised in the future. We, who areresponsible for management as entrusted by the shareholders, have focused our efforts on IR
activities to get the fair value of the shares of the Company understood by the shareholders
and investors. However, in the event of a sudden mass acquisition of the shares, for theshareholders who are required to properly judge whether the price for the acquisition offeredby the purchaser is adequate or not in a short period, we consider it vital to be provided withadequate and sufficient information from both the purchaser and the Board of Directors of theCompany. Additionally, for the shareholders in considering whether or not to continue
holding the shares of the Company, we believe that such information as the impact of theacquisition on the Company, the details of the management policy and business plans and past
investing activities of the purchaser when the purchaser proposes to participate in the
management of the Company and the opinion of the Board of Directors as to the acquisition
will be important for making a decision.
In consideration of these factors, we have judged that any prospective purchaser of theshares of the Company for the purpose of mass acquisition should be required to provide with
the Board of Directors in advance such necessary and sufficient information as to allow theshareholders to consider the acquisition in accordance with some reasonable rules prescribedby the Company and publicized in advance, and to be able to commence the acquisition only
after the lapse of a specified evaluation period for the Board of Directors.
In fact, some mass acquisition may cause permanent damage to the Company andmaterially injure its corporate value and the common interests of its shareholders. We,
responsible for the management of the Company, recognize that we are naturally responsible
for protecting against such mass acquisition the fundamental philosophy and brands of theCompany and the interests of its shareholders and other stakeholders.
To fulfill such responsibility, the Board of Directors recognizes that with regard to any
purchase of shares for the purpose of mass acquisition (or any proposed purchase), it isnecessary to carefully investigate and judge the effect of such purchase (or such proposed
purchase) that may have on the corporate value of the Company and the common interests of
its shareholders, in consideration of the nature of business, future business plans and past
investing activities of the purchaser, among other factors.
Hence, we believe that to protect the corporate value of the Company and the common
interests of its shareholders, it is necessary for the Board of Directors to take measures it
considers adequate in accordance with some reasonable rules prescribed by the Company andpublicized in advance.

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The aforementioned fundamental policy on what the person(s) should be like tocontrol the determination of the financial and business policy of the Company will be referred
to as the "Fundamental Policy" hereinafter.
The state of principal shareholders as of November 30, 2013 is as described inMaterial 1. The Company has business, including purchase of products and lease of offices,with Nakashimato Co., Ltd. and Touka Co., Ltd., which are among the principal shareholders
described in Material 1. However, the Company and these shareholders have forged
relationship of independence from each other in determining their respective financial andbusiness policies. While such large shareholders exist, there is no denying the possibility ofa large purchase action that may materially injure the corporate value of the Company and thecommon interests of its shareholders. Hence, the Company considers it necessary to devise
and maintain some rational rules against large purchase actions in accordance with theFundamental Policy.

II.

Special measures to facilitate the implementation of the Company's Fundamental
PolicyTo encourage many investors to invest in the Company on a continued, long-termbasis, it has implemented the following measures to facilitate the enhancement of its corporate
value and the common interests of its shareholders. We believe these measures will
facilitate the implementation of the Company's Fundamental Policy.
1.

Institution of the Group's medium-term business plan

The Group has instituted a medium-term business plan for three years commencing
December 1, 2012 to further enhance its corporate value by making the most use of thecorporate value set forth in Chapter I, Section 1 "Source of the corporate value of theCompany" above.
In the medium-term business plan, the Group, with the aim of cultivating a culture ofchallenging by the Group as one and ensuring continued growth in Japan together withsignificant growth overseas, has instituted four management policies (strengthening ourmanagement base, innovation in Japan, developing overseas business in earnest and laying afoundation for the future) round upon "making the most of our unique capabilities and an
ability to create new products, markets, and demand".

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To put the medium-term business plan into action, the Group will make aggressive
business and equipment investment to strengthen its revenue-generating base and enhance
asset efficiency in each business division round upon the above-mentioned management
policies, which we believe will facilitate the enhancement of its corporate value and thecommon interests of its shareholders.
2.

Upgrading of corporate governanceTo continuously increase its corporate value and the common interests of its
shareholders through efficient and sound management, the Group regards the upgrading of its
organizations, schemes and systems of management and timely and proper implementation ofnecessary measures as one of the most important management challenges.
To more clearly define the management responsibility for each fiscal year andestablish a management structure that can respond to changes in the business environmentswith agility, the Company has set the term of office of Directors to one year. Additionally,
to further strengthen its audit system, the Company has employed a system of four Corporate
Auditors, including three outside Corporate Auditors.

III.

Measures to prevent the determination of the financial and business policy of theCompany from being controlled by any inadequate person in consideration of theFundamental Policy (a defense plan against large purchase actions of the shares of theCompany (takeover defense plan))

The Company will institute the rules (the "Large Purchase Rules"), as described below,
as measures to prevent the determination of the financial and business policy of the Company
from being controlled by any inadequate person in consideration of the Fundamental Policy.
The defense plan against a large purchase action of the shares of the Company(takeover defense plan) described in Chapter III, Sections 1 through 6 will be referred to as
the "Defense Plan" hereinafter.
The Defense Plan satisfies all of the three principles provided in the "Guidelines
Regarding Takeover Defense for the Purposes of Protection and Enhancement of Corporate
Value and Shareholders' Common Interests" released by the Ministry of Economy, Trade andIndustry and the Ministry of Justice on May 27, 2005, namely, (i) securing the corporate value
and shareholders' common interests, (ii) prior disclosure and the principle of upholding theshareholders' intent, and (iii) necessity and suitability principle. Additionally, adequate-7–

consideration has been given to the content of the "Appropriate Takeover Defense Measuresin Consideration of Recent Environmental Changes" publicized on June 30, 2008 by the
Corporate Value Study Group established by the Ministry of Economy, Trade and Industry.
For a summary of the Defense Plan (flowchart), please refer to Material 2.
1.

Coverage of the Defense Plan

The Defense Plan covers (i) a purchase of shares and other securities (see Note 3) ofthe Company to make the ratio of voting rights (see Note 2) of any specified shareholder
group (see Note 1) 20% or more, or (ii) a purchase of shares and other securities of theCompany resulting in making the ratio of voting rights of any specified shareholder group
20% or more (whether by market trading, by TOB or otherwise; with regard to any TOB,
upon public notice of the commencement thereof, it shall be regarded as a purchase),
excepting any purchase agreed to by the Board of Directors in advance.
Any purchase action covered by the Defense Plan shall be referred to as a "Large
Purchase Action" and any person engaging in a Large Purchase Action shall be referred to asa "Large Purchaser" hereinafter, respectively.
Note 1: A specified shareholder group means:(i)a holder(s) (including any person included in the holders under Article 27-23,
paragraph 3 of the Financial Instruments and Exchange Law (hereinafterreferred to as the "FIEL"); the same applies hereinafter) of shares and othersecurities (as defined in Article 27-23, paragraph 1 of the FIEL) of the Company
and any joint holder(s) (as defined in Article 27-23, paragraph 5 of the FIEL andincluding any holder(s) deemed to be his/her/its joint holder(s) under paragraph
6 of the same Article thereof; the same applies hereinafter), or(ii)

a person(s) conducting a purchase, etc. (as defined in Article 27-2, paragraph 1of the FIEL and including any purchase conducted either by bidding or not, andon a securities market of any stock exchange) of shares and other securities (asdefined in Article 27-2, paragraph 1 of the FIEL) of the Company and his/her/its
affiliated person(s) (as defined in Article 27-2, paragraph 7 of the FIEL).

Note 2: Ratio of voting rights means:(i)in the case of Note 1 (i) above, the holder's holding ratio of shares and other-8–

securities (as defined in Article 27-23, paragraph 4 of the FIEL, in which casethe number of shares held by the holder's joint holder (as defined under the same
paragraph; the same applies hereinafter) shall be taken into account), or(ii)

in the case of Note 1 (ii) above, the total of the Large Purchaser's and affiliatedperson's holding ratios of shares and other securities (as defined in Article 27-2,
paragraph 8 of the FIEL).
For the purpose of calculating each holding ratio of shares and other securities,
the total number of voting rights (as defined in Article 27-2, paragraph 8 of theFIEL) and the total number of issued shares (as defined in Article 27-23,
paragraph 4 of the FIEL) may be referred to in the securities report, quarterly
report or report on the purchase by the company of its own shares, whichever
has most recently been filed.

Note 3: Shares and other securities mean those defined in Article 27-23, paragraph 1 of the
FIEL.
2.

Particulars of the Large Purchase Rules

The Company will institute Large Purchase Rules under which any Large Purchaser
can commence a large purchase action only after (1) it provides the Board of Directors of theCompany with necessary and sufficient information on the large purchase action in advanceand (2) a specified period of evaluation thereof by the Board of Directors elapses.
With regard to the Large Purchase Rules, the Company will (3) establish an
Independent Committee to ensure the Defense Plan to be implemented properly and prevent
arbitrary judgments by the Board of Directors as far as possible and (4) follow procedures forconfirming the intention of the shareholders as the necessity arises from the perspective ofrespecting their intention.
The particulars of the Large Purchase Rules to be instituted by the Company aredescribed below:(1)

Provision of information

Any Large Purchaser must submit to the Representative Director of the Company a"declaration of intention", which shall state its name and address, the law under which it wasorganized, the name of its representative and its contact address in Japan, as well as the-9–summary of the proposed large purchase action, together with a covenant to comply with theLarge Purchase Rules, and provide the Board of Directors with necessary and sufficient
information ("Necessary Information") to allow the shareholders to make judgments and theBoard of Directors to formulate an opinion.
Within 10 business days after receipt of a declaration of intention from the Large
Purchaser, the Board of Directors will deliver to the Large Purchaser a list of Necessary
Information to initially be provided by the Large Purchaser and it must provide suchinformation. If, then, the information provided by the Large Purchaser is found to be
insufficient after the close investigation thereof, the Board of Directors will repeatedly request
the Large Purchaser to provide such information as to make Necessary Information necessary
and sufficient, subject to the receipt of recommendations to the same effect from the
Independent Committee (which will be discussed in Chapter III, Section 2 (3) "Independent
Committee" below).
The specific content of the Necessary Information may vary according to the attributeof the Large Purchaser and the purpose and content of the large purchase action. However,some of the general items are as follows:(i)

Outline of the Large Purchaser and its group (including its joint holders andaffiliated persons) (including information on its business lines, capitalcomposition, experience in businesses similar to those of the Company and theGroup (food business, including manufacture and sale of mayonnaise anddressings, the Group's core business, and distribution business) and past
investment activities);(ii)

Purpose and content of the large purchase action (including the price and kindof consideration for the purchase, the timing of the purchase, the scheme ofrelated transactions, the validity of the method of the purchase and thefeasibility of the purchase and related transactions);(iii)

Basis of the calculation of the price for the acquisition of the shares of theCompany and the source of financing of the acquisition (including the specificname of the financier(s) (including substantial financier(s)), the method offinancing and the details of related transactions);(iv)

Planned candidate management (including information on experience inbusinesses similar to those of the Company and the Group (food business,
including manufacture and sale of mayonnaise and dressings, the Group's core
- 10 –

business, and distribution business)), management policy, business plan(including attitudes towards the development and cultivation of products in
response to customers' preferences and proposals of new eating habits andmenus, measures against changes in prices of major raw materials, measuresagainst product accidents and issues of food safety and sanitation and measures
for maintaining good relation with important trading partners), financing plan,
capital policy, dividend policy and asset utilization measures after participationin management of the Company and the Group ("After-Purchase Management
Plan"); and(v)

Changes expected or not expected to occur in the relations of the Company and
the Group with its/their stakeholders, including trading partners, customers andemployees after the completion of the large purchase action.

In the event that the Board of Directors receives a declaration of intention from theLarge Purchaser, sends a list of the Necessary Information to the Large Purchaser and theprovision of the Necessary Information by the Large Purchaser is completed, the Board of
Directors will promptly give public notice thereof, respectively. Additionally, the Board of
Directors will disclose all or part of the Necessary Information to the shareholders andinvestors in the event that it considers it necessary to do so to allow the shareholders to makejudgments, at such time as considered adequate by the Board of Directors.
(2)

Period of evaluation by the Board of Directors

The Board of Directors considers that after the completion of the necessary andsufficient Necessary Information by the Large Purchaser to the Board of Directors, according
to the degree of difficulty in the evaluation of the large purchase action, 60 days (in case of apurchase of all of the shares of the Company by a TOB the consideration for which is only
cash (in the yen)) or 90 days (in cases of other large purchase actions) should be allowed to
the Board of Directors as a period for the Board of Directors' evaluation, deliberation,negotiation, formulation of an opinion, preparation of an alternative proposal, determinationof the necessity to follow procedures for confirming the intention of the shareholders anddetermination of whether nor not to trigger the Defense Measure (the "Directors' Evaluation
Period"). Any large purchase action may be commenced only after the lapse of the
Directors' Evaluation Period.
During the Directors' Evaluation Period, the Board of Directors of the Company will
fully evaluate and deliberate on the Necessary Information provided by the Large Purchaser
while consulting with the Independent Committee and seeking advice from third-party experts- 11 –

whenever necessary, and carefully formulate an opinion of its own and publicize it. The
Board of Directors will also negotiate with the Large Purchase about any revision of theconditions of the large purchase action in its favor and/or present its alternative proposal on
the management policy of the Group to the shareholders of the Company whenever necessary.
In any unavoidable circumstance where the Board of Directors fails to determine
whether or not to trigger the Defense Measure during the Directors' Evaluation Period (suchas circumstances where the Independent Committee fails to recommend the triggering of the
Defense Measure during the Directors' Evaluation Period and procedures for confirming theintention of the shareholders are followed as set forth in Chapter III, Section 2 (4) "Proceduresfor confirming the intention of the shareholders" below), the Board of Directors may, uponrecommendation from the Independent Committee, extend the Directors' Evaluation Period aslong as necessary but not exceeding 30 days (the period may be extended to follow
procedures for confirming the intention of the shareholders as set forth in Chapter III, Section
2 (4) "Procedures for confirming the intention of the shareholders" below). In the event thatthe Board of Directors determines to extend the Directors' Evaluation Period, it will
immediately disclose the specific period so determined to be extended and the reason for thenecessity thereof to the shareholders and investors pursuant to laws or ordinances and therules of the financial instrument exchange.
(3)

Independent Committee

The Company will establish an Independent Committee as a checking function toensure the Defense Plan to be implemented properly and prevent arbitrary judgments by the
Board of Directors. The Independent Committee shall consist of at least three members,
who shall be appointed from among outside experts (see Note 4) independent of the
management responsible for execution of business of the Company, outside Directors of theCompany and outside Corporate Auditors of the Company (outside Directors and outside
Corporate Auditors are in a position to express impartial opinions, free of influence frompersons in charge of execution of business), to enable them to make fair and indifferent
judgments. When the continuation of the Defense Plan is approved at the 101st Ordinary
General Meeting of Shareholders, the names and profiles of the initial members of the
Independent Committee after the continuation will be as described in Material 3. The
outline of the Independent Committee will be as described in Material 4.
To make important judgments with regard to the Defense Plan, such as whether or not
the Large Purchaser observes the Large Purchase Rules (see Chapter III, Section 3 (1) "Incase the Large Purchaser observes the Large Purchase Rules" below), whether or not the
Directors' Evaluation Period should be extended (see Chapter III, Section 2 (2) "Period of- 12 –

evaluation by the Board of Directors" above), whether or not the large purchase action isconsidered to materially injure the corporate value of the Company and the common interestsof its shareholders (see Chapter III, Section 3 (1) "In case the Large Purchaser observes theLarge Purchase Rules" below) and whether or not to trigger the Defense Measure, the Boardof Directors shall consult with the Independent Committee without fail and respect its
recommendation to the maximum extent possible.
The Independent Committee may receive advice from any third-party expert
independent of the Board of Directors or the Independent Committee itself as the necessity
arises. All cost defrayed in obtaining such advice shall be borne by the Company, barring
exceptions considered specifically unreasonable.
Any resolution of the Independent Committee shall be adopted at a meeting of the
Independent Committee at which all the members thereof then in office shall be present, by amajority of the members present thereat; provided, however, that if any member is unable tobe present or in any other unavoidable circumstance, such resolution shall be adopted at a
meeting of the Independent Committee at which a majority of the members then in officeshall be present, by a majority of the members present thereat.
Note 4:(4)"Outside expert" means any corporate executive having broad experience inbusiness management, person familiar with investment banking business, attorney,certified public accountant, academic expert who majors in corporate laws and anyother similar person.
Procedures for confirming the intention of the shareholders

In determining whether or not to trigger the Defense Measure against a large purchaseaction, the Board of Directors may request the shareholders to judge whether or not to trigger
the Defense Measure against such large purchase action, from the perspective of respecting
their intention. In the event that the Board of Directors considers it necessary and adequate
to follow the procedures for confirming the intention of the shareholders by taking into
consideration the details of the large purchase action proposed by the Large Purchaser, theNecessary Information provided by the Large Purchase, the circumstance that requires theBoard of Directors to determine whether or not to trigger the Defense Measure and costs
required to follow the procedures for confirming the intention of the shareholders, the Boardof Directors shall follow the procedures. Additionally, in the event that the Board of
Directors receives a recommendation to follow the procedures to confirming the intention of
the shareholders from the Independent Committee, the Board of Directors shall respect such
recommendation to the maximum extent possible.
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To confirm the intention of the shareholders, a resolution shall be adopted at a General
Meeting of Shareholders under the Corporation Law of Japan. In the event that such
General Meeting of Shareholders is held, the Board of Directors shall, pursuant to theresolution adopted thereat, trigger, or not trigger, the Defense Measure against the proposedlarge purchase action as the case may be. Whenever necessary, the Board of Directors shallpromptly fix a record date ("Record Date") to determine the shareholders entitled to exercise
their voting rights at the General Meeting of Shareholders and give notice thereof no later
than two weeks prior to the Record Date by a method specified in the Articles ofIncorporation of the Company. The date of the General Meeting of Shareholders shall be
fixed within the initially fixed Directors' Evaluation Period, in principle. However, in any
unavoidable circumstance where it takes time procedurally to convene a General Meeting of
Shareholders or otherwise, the Board of Directors may extend the Directors' Evaluation
Period for 30 days upon recommendation from the Independent Committee.
(i)

The shareholders entitled to exercise their voting rights at the General Meetingof Shareholders shall be those recorded in the final register of shareholders as of
the Record Date.

(ii)

Any resolution at the General Meeting of Shareholders shall, pursuant to laws orordinances and the Articles of Incorporation of the Company, be adopted by amajority of the votes of the shareholders present thereat who shall be entitled toexercise their voting rights.

(iii)

In the event that there occurs any material change in the information (such as
the revocation by the Large Purchaser of the large purchase action) for theshareholders to make judgments at the General Meeting of Shareholders, theBoard of Directors may alter the Record Date even after such Record Date is
fixed for the General Meeting of Shareholders, or postpone or cancel the
General Meeting of Shareholders.

3.

Defense Measure when a large purchase action is taken(1)

In case the Large Purchaser observes the Large Purchase Rules

In case the Large Purchaser observes the Large Purchase Rules, the Board of Directors
will not trigger the Defense Measure against the large purchase action, in principle. Whether
or not to agree to the purchase proposal by the Large Purchase will be left to the judgment of
the respective shareholders.
- 14 –

However, if the Large Purchaser is considered not to seriously aim for reasonable
management but the large purchase action of the Large Purchaser is considered to cause
permanent damage to the Company, whereby materially injuring its corporate value and thecommon interests of its shareholders, the Board of Directors may exceptionally implement
any appropriate measure to protect the interests of its shareholders. The following cases
may be judged to materially injure the corporate value of the Company and the common
interests of its shareholders:(i)

The Large Purchaser takes a large purchase action that will result in an apparent
injury of the corporate value of the Company and the common interests of its
shareholders as set forth in items i) through iv) below:i)

The Large Purchaser has no true intention to participate in the management of
the target company but engages in the purchase of shares for the purpose ofraising the price of the shares and selling them at higher prices to the parties
related to the target company;ii)

The Large Purchaser purchases the shares for the purpose of enabling theLarge Purchaser to transfer a so-called "crown jewel," including intellectual
proprietary rights, know-how, trade secrets, principal trading partners andcustomers, etc. of the target company and its group under its temporary
management to the Large Purchaser and/or its group companies (scorchedearth policy);iii) The Large Purchaser purchases the shares for the purpose of diverting assetsof the target company and its group to mortgages and/or repayments ofliabilities incurred by the Large Purchaser and its group companies, etc. after
it gains control of management of the target company; andiv) The Large Purchaser purchases the shares for the purpose of enabling theLarge Purchaser to cause the target company and its group under its
temporary management to pay temporarily high returns to the shareholders
with proceeds from sales of the real estate, securities and expensive assets, etc.
not relevant to the current business of the target company and its group or tosell out the target company's shares at such higher prices arising from the
sharp rise of the target company's shares due to a temporary high return, etc.
to the shareholders.

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(ii)The purchase method of the shares of the Company proposed by the Large
Purchaser falls under a two-tier coercive purchase proposal (i.e., at the firststage, the purchase of the entire Company's shares are not solicited but at thesecond stage, the purchase will be consummated at less favorable or unspecified
conditions to the shareholders).

For the Defense Measure, the Board of Directors will select the most appropriate
vehicle in its judgment when it triggers the Defense Measure, by taking into consideration thenecessity and adequacy thereof. For that purpose, in the event that the Board of Directors
selects the free allocation of stock acquisition rights as a vehicle for the Defense Measure, thesummary thereof shall be as described in Material 5.
In determining whether or not to trigger the Defense Measure as described above, inorder to ensure the objectivity and rationality of the determination, the Board of Directors will
investigate the specific contents of the Large Purchaser and the large purchase action and aprospective impact of the large purchase action on the corporate value of the Company andthe common interests of its shareholders, based on the Necessary Information, including an
After-Purchase Management Policy, provided by the Large Purchaser and by receiving advice
from any third-party expert whenever necessary, and respect recommendations from the
Independent Committee to the maximum extent possible. Additionally, as described in
Chapter III, Section 2 (4) "Procedures for confirming the intention of the shareholders" above,a General Meeting of Shareholders may be held to seek the judgment of the shareholders.
(2)

In case the Large Purchaser does not observe the Large Purchase Rules

In case the Large Purchaser does not observe the Large Purchase Rules, in order toprotect the corporate value of the Company and the common interests of its shareholders, theBoard of Directors will trigger the Defense Measure, including the issuance of stockacquisition rights, as authorized by the Corporation Law and other laws or ordinances and the
Articles of Incorporation of the Company, against the large purchase action by taking into
consideration the necessity and adequacy thereof. The Board of Directors will determine
whether or not the Large Purchaser observes the Large Purchase Rules and whether or not it isappropriate to trigger the Defense Measure, by reference to the opinions of third-party experts
and by respecting recommendations from the Independent Committee to the maximum extent
possible. Additionally, as described in Chapter III, Section 2 (4) "Procedures for confirming
the intention of the shareholders" above, a General Meeting of Shareholders may be held toseek the judgment of the shareholders.

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For the Defense Measure, the Board of Directors will select the most appropriate
vehicle in its judgment then (As described in Chapter III, Section 2 (4) "Procedures forconfirming the intention of the shareholders" above, a General Meeting of Shareholders may
be held to seek the judgment of the shareholders. In such case, the Board of Directors willcomply with any resolution of the General Meeting of Shareholders.). In the event that theBoard of Directors selects the free allocation of stock acquisition rights as a vehicle for the
Defense Measure, the summary thereof shall be as described in Material 5.
(3)

Cessation of the triggering of the Defense Measure

Even after the determination to trigger the Defense Measure, in the event that theLarge Purchaser revokes or alters the large purchase action or otherwise the Board of
Directors judges it inappropriate to trigger the Defense Measure, it may alter or cease thetriggering of the Defense Measure by respecting recommendations from the Independent
Committee to the maximum extent possible.
In the event that the Board of Directors makes a free allocation of stock acquisitionrights as a vehicle for the Defense Measure, if, after the determination of the shareholders
qualified for the allocation of stock acquisition rights, the Large Purchaser revokes or alters
the large purchase action or otherwise and consequently, the Board of Directors judges it
inappropriate to trigger the Defense Measure, it may cease the triggering of the Defense
Measure, as described below:(i)

At any time prior to the day on which the free allocation of the stock acquisitionrights shall become effective, the Board of Directors may cease the freeallocation of the stock acquisition rights by respecting recommendations fromthe Independent Committee to the maximum extent possible.

(ii)

At any time on or after the day on which the free allocation of the stockacquisition rights shall become effective and prior to the commencement of theexercise period of the stock acquisition rights, the Board of Directors may
acquire the stock acquisition rights without compensation by respecting
recommendations from the Independent Committee to the maximum extent
possible.

In the event that the Board of Directors ceases the triggering of the Defense Measure
as described in item (i) or (ii) above, it will promptly disclose all necessary and sufficient
information, including such matters as considered necessary by the Independent Committee,
to the shareholders and investors.
- 17 –

With regard to the alteration of the triggering of the Defense Measure, in the event that
the Large Purchaser changes the number of shares to be acquired through the large purchaseaction, the Board of Directors may change the number of shares to be issued or transferred foreach stock acquisition right, for instance.
4.

Impacts on the shareholders and investors(1)

Impact of the Large Purchase Rules on the shareholders and investors

The Large Purchase Rules are intended to afford opportunities to the shareholders of
the Company to receive information necessary for them to judge whether or not to agree to alarge purchase action, have the Board of Directors entrusted by the shareholders to manage
the Company put forward its opinion thereon and have any alternative proposal for
management of the Company offered to them. We believe that the Large Purchase Rules
will allow the shareholders, with sufficient information provided, to make appropriate
judgments as to whether or not to agree to a large purchase action, which will result in theprotection of the corporate value of the Company and the common interests of its
shareholders. Thus, we believe that the institution of the Large Purchase Rules, which areintended to help the shareholders make appropriate investment judgments, will benefit theshareholders of the Company and investors.
As described in Chapter III, Section 3 "Defense Measure when a large purchase action
is taken," defense policies of the Company on a large purchase action vary, depending onwhether the Large Purchaser observes the Large Purchase Rules or not. Therefore, it isadvisable for the shareholders of the Company and investors to pay attention to the action of
the Large Purchaser.
(2)

Impact on the shareholders and investors when the Defense Measure is triggered

In case the Large Purchaser does not observe the Large Purchase Rules, the Board of
Directors may trigger the Defense Measure, as authorized by the Corporation Law and otherlaws or ordinances and the Articles of Incorporation of the Company, to protect the corporate
value of the Company and the common interests of its shareholders. However, under thescheme of the Defense Measure, it is not assumed that the shareholders (excluding the Large
Purchaser (including specified shareholder group) against which the Defense Measure is
triggered) of the Company will incur any specific loss on their legal rights or economic
interests. In the event that the Board of Directors determines to trigger the Defense Measure,it will make timely and proper disclosure pursuant to laws or ordinances and the rules of the- 18 –

financial instrument exchange. In the event that the Board of Directors ceases to issue stockacquisition rights or acquire the issued stock acquisition rights without consideration, thestock value per share will not be diluted. Hence, any shareholder or investor who trades inthe shares, assuming that the stock value of the Company will be diluted on or after the exdate relating to the free allocation of stock acquisition rights may incur an unexpected loss
due to stock price movements.
(3)

Procedures to be followed by the shareholders when the Defense Measure is triggered(i)

Procedures for the registration of transfers of shares

In the event that the Board of Directors determines to make a free allocation of stockacquisition rights as a vehicle for the Defense Measure, the Company will give public noticeof the record date for the free allocation thereof. As the stock acquisition rights will beallocated free of charge to the shareholders recorded in the final register of shareholders of theCompany as of the record date, the shareholders will have to be recorded in the final registerof shareholders as of the record date.
(ii)

Procedures for exercise of stock acquisition rights

In the event that the Board of Directors determines to make a free allocation of stockacquisition rights as a vehicle for the Defense Measure, the Company may send a form of
exercise of stock acquisition rights (a form designated by the Company to include necessary
matters, such as the content and number of the stock acquisition rights to be exercised, and thestatement confirming that the shareholder does not belong to any specified shareholder group)and other documents necessary for the exercise of stock acquisition rights to each of theshareholders recorded in the final register of shareholders of the Company as of the record
date. In that event, when, after the free allocation of the stock acquisition rights, any
shareholder submits a form of exercise of stock acquisition rights and other necessary
documents therefor and pays such price for each stock acquisition right no less than one yen
as determined in the resolution for the free allocation of the stock acquisition rights adopted
by the Board of Directors at any payment handling place during the exercise period of thestock acquisition rights, such number of shares of the Company as determined separately by
the Board of Directors will be issued per stock acquisition right.
(iii)

Procedures for the acquisition by the Company of stock acquisition rights

In the event that the Board of Directors determines to acquire stock acquisition rights,
the Company will acquire the stock acquisition rights as of the date separately designated by- 19 –

the Board of Directors, in accordance with the statutory procedures. In the event that theBoard of Directors shall deliver the shares of the Company to the shareholders in exchange
for the acquisition of their stock acquisition rights, it will do so promptly. In the event thatthe Board of Directors acquires the stock acquisition rights, each of the shareholders acquiring
the shares in exchange for the stock acquisition rights may be requested to submit a form
designated by the Company including the statement confirming that the shareholder does notbelong to any specified shareholder group.
For further details of the methods of allocation, the registration of transfers of shares,
the exercise of stock acquisition rights and the acquisition thereof by the Company,
information will be disclosed or notified to the shareholders after the determination of theBoard of Directors with regard to the Defense Measure.
5.

Effective period of the Defense Plan

In the event that the continuation of the Defense Plan is approved at the 101stOrdinary General Meeting of Shareholders, the effective period of the continued Defense Plan
shall be extended until the close of the 104th Ordinary General Meeting of Shareholders to beheld no later than February 28, 2017 and in the event that the continuation of the Defense Plan
is approved at the Ordinary General Meeting of Shareholders of the Company relating to thelast fiscal year ending within three years thereafter, it shall be extended for three more years.
In the event that the continuation of the Defense Plan is so approved, the Board of Directors
will promptly give notice thereof.
Even in the event that the continuation of the Defense Plan is approved, from theperspective of protecting the corporate value of the Company and the common interests of its
shareholders, the Board of Directors will review the plan from time to time by taking into
consideration the developments of related laws or ordinances and the listing policy devised by
the Tokyo Stock Exchange and may alter or abolish the Defense Plan upon approval of theGeneral Meeting of Shareholders whenever necessary. In such case, the details thereof will
be notified promptly.
6.
The Defense Plan's compliance with the Fundamental Policy, not injuring the common
interests of the shareholders of the Company and not contemplated to maintain the position of
the officers of the Company, and the reasons therefor(1)

The Defense Plan's compliance with the Fundamental Policy
The Defense Plan stipulates the particulars of the Large Purchase Rules, the defense- 20 –

plan in case of a large purchase action, the establishment of an Independent Committee andthe impacts on the shareholders and investors.
The Defense Plan requires any Large Purchaser to provide the Board of Directors withnecessary and sufficient information on a large purchase action in advance and commence thelarge purchase action only after the lapse of the Directors' Evaluation Period and specifies thatthe Board of Directors may trigger any defense measure against the Large Purchaser not
observing the Large Purchase Rules.
The Defense Plan also stipulates that even in the event that the Large Purchaser
observes the Large Purchase Rules, if its large purchase action is considered by the Board of
Directors to materially injure the corporate value of the Company and the common interestsof its shareholders, the Board of Directors may trigger any defense measure consideredappropriate to protect the corporate value of the Company and the common interests of its
shareholders.
Hence, we believe the Defense Plan complies with the Fundamental Policy.
(2)

The Defense Plan's not injuring the common interests of the shareholders of theCompany

As described in "Fundamental policy on what the person(s) should be like to control
the determination of the financial and business policy of the Company," the Fundamental
Policy is based on respect for the corporate value of the Company and the common interestsof its shareholders. The Defense Plan, which is designed according to the philosophy of theFundamental Policy, is intended to afford the opportunities to the shareholders of theCompany to receive information necessary for them to judge whether or not to agree to alarge purchase action, have the Board of Directors put forward its opinion thereon and haveany alternative proposal offered to them. The Defense Plan will allow the shareholders of
the Company and investors to make appropriate investment judgments. Thus, we believethat the Defense Plan will not injure the common interests of the shareholders of theCompany but rather benefit their interests.
In addition, the effectuation and extension of the Defense Plan is subject to theapproval of the shareholders. The Defense Plan has no "dead-hand clause" (a clause thatprevents triggering a takeover defense measure if any member of the board of directors that
adopted the measure is replaced) or "slow-hand clause" (a clause that prevents triggering a
takeover defense measure for a specified period even if a majority of the members of theboard of directors that adopted the measure are replaced) and consequently, the shareholders- 21 –

of the Company can abolish the Defense Plan whenever they wish to do. Thus, we believethat the Defense Plan gives assurance that the common interests of the shareholders of theCompany will not be injured.
(3)

The Defense Plan's not contemplated to maintain the position of the officers of theCompany

Based on the principle of leaving the final judgment to the shareholders of theCompany as to whether or not to agree to a large purchase action, the Defense Plan allows theBoard of Directors to request compliance with the Large Purchase Rules and trigger a defense
measure to the extent necessary to protect the corporate value of the Company and thecommon interests of its shareholders. The Defense Plan discloses the conditions on thetriggering of defense measures by the Board of Directors in advance and in details and any
defense measure by the Board of Directors shall be triggered in accordance with theprovisions of the Defense Plan. The Board of Directors cannot effectuate or extend the
Defense Plan by itself, but subject to the approval of the shareholders of the Company.
In addition, to trigger a defense measure, the Board of Directors shall seek advice
from third-party experts whenever necessary in making any important decision on the
Defense Policy, and consult with the Independent Committee consisting of the members
independent of the management responsible for execution of business and respectrecommendations from the Independent Committee to the maximum extent possible.
Furthermore, the Board of Directors can follow procedures for confirming the intention of theshareholders as the necessity arises from the perspective of respecting their intention. The
Defense Plan contains procedures to ensure the proper operation thereof by the Board of
Directors.
Thus, we believe that the Defense Plan clearly is not contemplated to maintain theposition of the officers of the Company.

-END-- 22 –

Material 1
State of Principal Shareholders
The state of principal shareholders as of November 30, 2013:

Rank

Number ofshares held
(Shares)Name

Ratio of theshares held tothe total number
of issued shares(%)

1

Nakashimato Co., Ltd.

19,371,513

12.66

2

Touka Co., Ltd.

11,872,670

7.76

3

Japan Trustee Service Bank, Ltd. (Trust account)

4,929,600

3.22

4

Trust & Custody Services Bank, Ltd.: trustee ofsub-trust of Mizuho Trust & Banking Co., Ltd.
Employee Retirement Benefit Trust Accountfor Mizuho Bank, Ltd.

4,827,000

3.15

5The Master Trust Bank of Japan, Ltd. (Trustaccount)

4,412,000

2.88

6

Kieikai Research Foundation

4,251,750

2.78

7Japan Trustee Service Bank, Ltd. (Trust account9)4,023,400

2.63

8Sumitomo Mitsui Banking Corporation

3,208,224

2.10

9

Nippon Life Insurance Company

3,085,964

2.02

10

Dai-ichi Mutual Life Insurance Company

3,012,360

1.97

Notes: 1. The ratios of the shares held to the total number of issued shares are shown by
rounding five or more in thousandth's place upward and the rest downward.
2. In addition to the above, the Company holds 3,262,107 shares of treasury stock.

- 23 –

Material 2
Overall flow of the Defense Plan in the event of a large purchase action
Emergence of Large Purchaser(Person intending to acquire shares with the 20% or more ratio of voting rights)

Application of the Large Purchase Rules(The Large Purchase Rules are not observed)(The Large Purchase Rules are observed)

Submission of a declaration of
intention with a covenantWithin 10
business days

Request by the Board of Directors forthe delivery of a list of the Necessary
Information and the provision of
information

Not submitted

Not provided

Completion of the provision of theNecessary Information
Evaluation, deliberation, formulation ofan opinion, negotiation, preparation ofan alternative proposal andconsideration of whether or not totrigger the Defense MeasureWithin 60 da ys or
90 days (N ote 2)

Procedures for consulting with and seeking
recommendations from the Independent
Committee

Procedures for consulting with andseeking recommendations from the
Independent Committee

Convocation of a General
Meeting of Shareholders

Convocation of a General
Meeting of Shareholders

In the judgment of the Board of
Directors, will the large purchase action
materially injure the enterprise value of
the Company and the common interestsof its shareholders?

Judgment of the Board of Directors

Yes

Ｎo
Trigger the Defense Measure by freeallocation of stock acquisition rights orotherwise

Not trigger the Defense Measure
To be left to the judgment of therespective shareholders

Notes:

1.

The above chart is a reference material to facilitate the comprehension of the Defense Plan. For
further details of the plan, please refer to the body text hereof.
2. In the event of the convocation of a General Meeting of Shareholders, in unavoidable circumstanceswhere the Directors' Evaluation Period must be extended, the period may be within 90 days or 120
days, respectively.

- 24 –

Material 3
Names and Profiles of the Members of the Independent Committee
Toshio Kamiyama(Date of birth: November 18, 1941)

February 1969

Registered as certified public accountant
Representative (Head), Kamiyama Certified Public Accountant
Office, to this date
April 1969
Registered as certified tax accountant
July 1992
Council Member, the Japanese Institute of Certified Public
Accountants
February 1995
President and Representative Director, Kabushiki Kaisha Nihon
Kaikeishi Gakkan (Japan Accountant Academy Co., Ltd.), to this dateJune 1998
Chairman of Tokyo Chapter, the Japanese Institute of Certified Public
Accountants
August 2001
Chairman of the Appeal Committee, the Japanese Institute ofCertified Public Accountants
Examiner of the Certified Public Accountant Examinations
July 2004
Auditor, the Japanese Institute of Certified Public Accountants
July 2007
Member of the Dispute Conciliation Committee, the JapaneseInstitute of Certified Public Accountants, to this date*
Mr. Kamiyama and the Company have no special interest in each other.

Yoji Wakui(Date of birth: February 5, 1942)

April 1964
Joined the Ministry of Finance
June 1993
Director-General of the Secretariat, the Economic Planning Agency
May 1995
Director-General of the Secretariat, the Ministry of FinanceJuly 1997
Director-General of the Budget Bureau, the Ministry of FinanceJuly 1999
Vice Chairman, Marine and Fire Insurance Association of Japan
February 2004
Corporate Auditor of the Company
June 2004
Chairman and Representative Director, Japan Tobacco Inc.
June 2006
Chairman and Director, Japan Tobacco Inc.
June 2012
Special Counsel, Japan Tobacco Inc., to this date*
Mr. Wakui and the Company have no special interest in each other.

- 25 –

Haruo Kasama
April 1974
September 1999
June 2001
October 2002
June 2005
June 2006
October 2007

(Date of birth: January 2, 1948)
Appointed as Public Prosecutor
Director-General, Special Investigation Department, the Tokyo
District Public Prosecutors Office
Chief Public Prosecutor, the Kofu District Public Prosecutors Office
Deputy Chief Prosecutor, the Tokyo District Public Prosecutors
OfficeDeputy Superintending Prosecutor, the Tokyo High Public
Prosecutors OfficeDirector-General, Criminal Affairs Division, the Supreme Public
Prosecutors Office
Deputy Prosecutor General, the Supreme Public Prosecutors Office

January 2009

Superintendent Public Prosecutor, the Hiroshima High Public
Prosecutors Office
June 2010
Superintendent Public Prosecutor, the Tokyo High Public Prosecutors
OfficeDecember 2010
Prosecutor General, the Supreme Public Prosecutors Office
October 2012
Registered as attorney (with the Daiichi Tokyo Bar Association), tothis dateJune 2013
Director, Japan Postal Holdings Co., Ltd., to this dateOutside Corporate Auditor, Sumitomo Corporation, to this date
Independent Audit & Supervisory Board Member, NKSJ Holdings,
Inc., to this date*
Mr. Kasama and the Company have no special interest in each other.

- 26 –

Material 4
Outline of the Independent Committee
1.

Establishment

An Independent Committee shall be established by resolution of the Board of
Directors of the Company.
2.

Members

The Independent Committee shall consist of at least three members authorized by the
Board of Directors, who shall be appointed from among outside Directors of the Company,
outside Corporate Auditors of the Company, corporate executives having broad experience inbusiness management, persons familiar with investment banking business, attorneys, certified
public accountants, academic experts who major in corporate laws and other similar persons
independent of the management responsible for execution of business of the Company. In
the event that the continuation of the Defense Plan is approved at the 101st Ordinary General
Meeting of Shareholders, the members expected to assume office after the continuation
thereof will be Messrs. Toshio Kamiyama, Yoji Wakui and Haruo Kasama.
3.

Term of office

In the event that the continuation of the Defense Plan is approved at the 101stOrdinary General Meeting of Shareholders, the term of office of the members of the
Independent Committee shall expire at the close of the Ordinary General Meeting of
Shareholders relating to the last fiscal year ending within three years after the close of the
101st Ordinary General Meeting of Shareholders and in the event that the continuation of the
Defense Plan is approved at the Ordinary General Meeting of Shareholders of the Company
relating to the last fiscal year ending within three years thereafter, it shall be extended forthree more years; provided, however, that the term of office of the members of the
Independent Committee shall not be extended if otherwise determined by the Board of
Directors. Additionally, in the event that any member of the Independent Committee who
has been outside Director of the Company or outside Corporate Auditor of the Company
ceases to be such outside Director or outside Corporate Auditor (unless he is reappointed as
Director or Corporate Auditor and has not lost the position of outside Director or outside
Corporate Auditor then), his term of office as the member of the Independent Committee shall
expire simultaneously.
In the event of any vacancy in the number of the members of the Independent- 27 –

Committee, a new member shall be appointed by resolution of the Board of Directors fromamong the persons who shall meet the requirement for the membership set forth in paragraph
2 above. The term of office of the newly appointed member shall be the remaining term ofoffice of the member who caused such vacancy.
4.

Requirements for resolutions

Any resolution of the Independent Committee shall be adopted at a meeting of the
Independent Committee at which all the members thereof then in office shall be present, by amajority of the members present thereat, in principle; provided, however, that if any member
is unable to be present or in any other unavoidable circumstance, such resolution shall be
adopted at a meeting of the Independent Committee at which a majority of the members thenin office shall be present, by a majority of the members present thereat.
In the event that no resolution was passed or adopted, the chairman of the Independent
Committee shall give report to that effect to the Board of Directors.
5.

Matters to be resolved

In the event that the Board of Directors consults with the Independent Committee, it
shall deliberate on the matters set forth in the following items according to such consultation
and by its resolution, determine the result of deliberations. In the event that the Independent
Committee adopts a resolution, it shall recommend the content of the resolution, together withthe reason therefor, to the Board of Directors. In performing their duties, the members of the
Independent Committee must do so from the perspective of benefiting the corporate value of
the Company and the common interests of its shareholders, but not for the purpose of
benefiting themselves or any third party (including the management of the Company).
(i)

Whether or not the relevant action falls under any large purchase action under theLarge Purchase Rules;(ii)

Necessary Information to be provided by the Large Purchaser to the Board of
Directors and the deadline thereof;(iii)

Close investigation of and deliberation on the Necessary Information provided by
the Large Purchaser;(iv)

Close investigation of and deliberation on the details of the large purchase action of
the Large Purchaser;- 28 –

(v)Whether or not the large purchase action will materially injure the corporate valueof the Company and the common interests of its shareholders;(vi)

Whether or not the Large Purchase observes the Large Purchase Rules;(vii)

Whether or not to extend the Directors' Evaluation Period;(viii)

Whether or not to consult with the General Meeting of Shareholders as to whether
nor not to trigger the Defense Measure;(ix)

Whether or not to trigger, alter or cease the Defense Measure;(x)

Deliberation on the continuation, alteration and cessation of the Large Purchase
Rules; and(xi)

Other matters consulted by the Board of Directors with the Independent Committee.

To ensure that the Independent Committee will make appropriate decisions, it must
endeavor to collect necessary and sufficient information in deliberating on any of the matterslisted above and may, at the expense of the Company (unless considered specificallyunreasonable), receive advice from any third-party expert (including any financial advisor,
certified public accountant, attorney, consultant and other professional).

- 29 –

Material 5
Summary of Stock Acquisition Rights
1.

Shareholders qualified for stock acquisition rights and the condition for the allocation
thereofTo the shareholders recorded in the final register of shareholders as of the record date
for the allocation of stock acquisition rights fixed by the Board of Directors, the Company
will allocate such number of stock acquisition rights for each of their shares of common stockof the Company (excluding those held by the Company) as shall be determined separately by
the Board of Directors, without payments therefor.
2.

Class and number of shares to be issued or transferred upon exercise of stockacquisition rights

The shares to be issued or transferred upon exercise of stock acquisition rights shall beshares of common stock of the Company. The total number of shares to be issued ortransferred upon exercise of stock acquisition rights shall not exceed the number obtained bydeducting the total number of issued shares of common stock of the Company (excluding
those held by the Company) from the total number of issuable shares of the Company as of
the record date for the allocation thereof fixed by the Board of Directors.
3.

Total number of stock acquisition rights to be allocated

The total number of stock acquisition rights to be allocated shall be the number to be
determined separately by the Board of Directors. The Board of Directors may allocate stockacquisition rights in two or more series.
4.

Amount of property to be contributed upon exercise of each stock acquisition right

The amount of property to be contributed (the amount to be paid in) upon exercise ofeach stock acquisition right shall be no less than one yen, as shall be determined by the Boardof Directors.
5.

Restriction on transfer of stock acquisition rights

The acquisition of stock acquisition rights by any transfer thereof shall be subject toapproval of the Board of Directors.
- 30 –

6.

Conditions for exercise of stock acquisition rights

Conditions for exercise of stock acquisition rights, such as the denial of the exercise
thereof by any person belonging to any specified shareholder group with the 20% or moreratio of voting rights, shall be established. The particulars of the conditions for exercise ofstock acquisition rights shall be established separately by the Board of Directors.
7.

Exercise period, reasons for the acquisition, and conditions for the acquisition of,stock acquisition rights and other necessary matters

The exercise period, reasons for the acquisition, and conditions for the acquisition of,stock acquisition rights and other necessary matters shall be determined separately by the
Board of Directors. In the event that shares of common stock are delivered in consideration
for the acquisition by the Company of stock acquisition rights, the maximum number of suchshares of common stock shall be the number obtained by deducting the total number of issued
shares of common stock of the Company (excluding those held by the Company) from thetotal number of issuable shares of the Company as of the date of the acquisition of stockacquisition rights.
Even after the determination to trigger the Defense Measure, in the event that theLarge Purchaser revokes or alters the large purchase action or otherwise the Board of
Directors judges it inappropriate to trigger the Defense Measure, it may cease the triggeringof the Defense Measure. On or after the day on which the free allocation of the stockacquisition rights shall become effective and prior to the commencement of the exercise
period of the stock acquisition rights, the Board of Directors may acquire the stock acquisitionrights without compensation by respecting recommendations from the Independent
Committee to the maximum extent possible.
The stock acquisition rights may be attached with terms of the acquisition thereof.
Such terms of the acquisition of the stock acquisition rights and the content of property to bedelivered in exchange for the acquisition thereof may vary with regard to (i) the stockacquisition rights to be acquired and (ii) the property to be delivered in consideration for theacquisition thereof, according to whether or not an allocatee of the stock acquisition rights
belongs to a specified shareholder group with the 20% or more ratio of voting rights.

- 31 –